Kitron Group | 2020.03.18
Capital Markets Presentation
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Capital Markets Presentation Kitron Group | 2020.03.18 1 Disclaimer - - PowerPoint PPT Presentation
Capital Markets Presentation Kitron Group | 2020.03.18 1 Disclaimer This presentation contains certain forward-looking information and statements. Such forward-looking information and statements are based on the current, estimates and
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This presentation contains certain forward-looking information and statements. Such forward-looking information and statements are based
forward-looking information and statements reflect current views with respect to future events and are subject to risks, uncertainties and
and statements can generally be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements sometimes use terminology such as “targets”, “believes”, “expects”, “aims”, “assumes”, “intends”, “plans”, “seeks”, “will”, “may”, “anticipates”, “would”, “could”, “continues”, “estimate”, “milestone” or other words of similar meaning and similar expressions or the negatives thereof. By their nature, forward-looking information and statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of the Company to differ materially from any future results, performance or achievements that may be expressed or implied by the forward-looking information and statements in this presentation. Should one or more
condition or results of operations could differ materially from that or those described herein as anticipated, believed, estimated or expected. Any forward-looking information or statements in this presentation speak only as at the date of this presentation. Except as required by the Oslo Stock Exchange rules or applicable law, the Company does not intend, and expressly disclaims any obligation or undertaking, to publicly update, correct or revise any of the information included in this presentation, including forward-looking information and statements, whether to reflect changes in the Company's expectations with regard thereto or as a result of new information, future events, changes in conditions, currency development or circumstances or otherwise on which any statement in this presentation is based. Given the aforementioned uncertainties, prospective investors are cautioned not to place undue reliance on any of these forward-looking statements.
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Strategy Market & Operations Financials Covid-19 Summary
CFO
COO and Sales Director
President & CEO
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Kitron is a leading Scandinavian Electronics Manufacturing Services company, delivering improved flexibility, cost efficiency, and innovation power throughout the value chain.
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Margin/complexity Volume
Local niche providers High-volume, low-margin providers
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▪ Growth, existing customers ▪ Growth, new customers ▪ Technical services sales
▪ Capacity expansion ▪ Operational excellence ▪ Competence roadmap ▪ Digitalization ▪ Technical roadmap
▪ Value chain expansion ▪ Entering new geographies ▪ Existing geographies
Significant changes Refining
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1,5 % 6,1 % 7,0 % 2013 2014 2015 2016 2017 2018 2019 2020 2025
EBIT margin
1 632 3 299 5 000 2013 2014 2015 2016 2017 2018 2019 2020 2025
Revenue
Organic 2020 target
Revenue NOK 3 300 to 3 700 million EBIT margin 6.4% to 7.0%
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Organic growth target 2020 of NOK 3 000 million achieved in 2019
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12 Source: Reed Electronics Research: The EMEA Electronic Manufacturing Services Industry 2018-2023
Number of Companies Sales from each group (Euro Billions)
Group 1 Global Group 2 Multinational €100-500m Group 3 Sub-Regional €20-100m Group 4 National €10-40m
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ENERGY/TELECOMS DEFENCE/AEROSPACE OFFSHORE/MARINE MEDICAL DEVICES INDUSTRY
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2019
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Existing geography New geography Existing value chain More likely Most likely Value chain expansion Likely Not likely
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1632 3299 5000 2013 2014 2015 2016 2017 2018 2019 2020 2025
Revenue
Organic 2020 target
Revenue NOK 3 300 to 3 700 million EBIT margin 6.4 to 7.0%
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1,5 % 6,1 % 7,0 % 2013 2014 2015 2016 2017 2018 2019 2020 2025
EBIT margin
Organic 2020 target
* Excluding one-offs.
25 202 2013 2014 2015 2016 2017 2018 2019 2020 2025
EBIT
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522 942 32% 20% 29% 2013 2014 2015 2016 2017 2018 2019 2020 2025
NOK million
Net working capital NWC as % of revenue
100 102 50 2013 2014 2015 2016 2017 2018 2019 2020 2025
Cash conversion cycle
Cash Conversion Cycle (CCC) = Days inventory outstanding + days sales outstanding - days payable outstanding. CCC is calculated as a 3 months rolling average
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5% 15% 25% 2013 2014 2015 2016 2017 2018 2019 2020 2025
Return on operating capital
▪ Higher profit ▪ Capital efficiency
Trade receivables – Trade payables)
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(MNOK)
Normal 29 67 76 66 82 70 59 60 Poland 51 US acquisition 138
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195 2013 2014 2015 2016 2017 2018 2019 2020
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Net interest-bearing debt divided by earnings before interest, taxes, depreciation and amortization.
4,4 2,4 2013 2014 2015 2016 2017 2018 2019*
NIBD/EBITDA
Target below 2.5
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* Adjusted for IFRS16 effects
Cash & cash equivalents 204
Long term debt to credit institutions
166
Lease Liability IFRS16
116
Long term debt - Financial leasing
50 Long term financing 331
Debt to credit institutions
323
Factoring debt
249
Lease Liability IFRS16
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Short term part of long term debt
67 Short term financing 657 Interest bearing debt 988 Net Interest bearing debt 784 Net Interest bearing debt excl IFRS 650
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“Kitron’s dividend policy is to pay out an annual dividend
before non-recurring items. When deciding on the annual dividend the company will take into account the company’s financial position, investment plans as well as the needed financial flexibility to provide for sustainable growth.”
5 14 42 43 57 63 72 5 21 25 35 40 50 20 2013 2014 2015 2016 2017 2018 2019 NOK 1/100
Earnings and dividends
EPS Ordinary dividend Additional dividend
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26 26 * Measured as EBIT growth in NOK. Financial figures in NOK million. Market cap and enterprise value at year end. Employees are full-time equivalents at year end.
1 196 1 722
2014 2019
Employees
1 751 3 299
2014 2019
Revenue
294 1 970
2014 2019
Market cap
1,7 % 6,1 %
2014 2019
EBIT margin
618 2 754
2014 2019
Enterprise value CAGR 38% CAGR 46% CAGR 14% CAGR 46%*
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larger fluctuations, if they should occur
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Order backlog All firm orders and 4 months of committed customers forecast at revenue value as at balance sheet date. Foreign exchange effects Group consolidation restated with exchange rates as comparable period the previous year. Change in volume or balance calculated with the same exchange rates for the both periods are defined as underlying growth. Change based on the change in exchange rates are defined as foreign exchange effects. The sum of underlying growth and foreign exchange effects represent the total change between the periods. EBITDA Operating profit (EBIT) + Depreciation and Impairments EBIT Operating profit EBIT margin (%) Operating profit (EBIT) / Revenue Net working capital Inventory + Accounts Receivable – Accounts Payable Operating capital Other intangible assets + Tangible fixed assets + Net working capital Return on operating capital (ROOC) % Annualised Operating profit (EBIT) / Operating Capital Return on operating capital (ROOC) R3 % (Last 3 months Operating profit (EBIT))*4 /(Last 3 months Operating Capital /3) Direct Cost Cost of material + Direct wages (subset of personnel expenses only to include personnel directly involved in production) Days of Inventory Outstanding 360/ (Annualised Direct Costs/Inventory) Days of Inventory Outstanding R3 360/ ((Last 3 months Direct Costs *4) /(Last 3 months Inventory/3)) Days of Receivables Outstanding 360/ (Annualised Revenue/Trade Receivables) Days of Receivables Outstanding R3 360/ ((Last 3 months Revenue*4)/(Last 3 months Trade Receivables/3)) Days of Payables outstanding 360/ ((Annualised Cost of Material + Annualised other operational expenses) /Trade Payables) Days of Payables Outstanding (R3) 360/ (((Last 3 months (Cost of Material + other operational expenses)*4) /(Last 3 months Trade Payables)/3)) Cash conversion cycle (CCC) Days of inventory outstanding + Days of receivables outstanding – Days of payables outstanding Cash conversion cycle (CCC) R3 Days of inventory outstanding (R3) + Days of receivables outstanding (R3) – Days of payables outstanding (R3) Net Interest-bearing debt
(Current liabilities) Interest-bearing debt Loans (Non- current liabilities) + Loans (Current liabilities) Net gearing Net Interest-bearing debt / Equity Free Cash flow Net Cash Flow from operating activities – Cash flows from acquisition
intangible assets Equity ratio Total Equity / Total Assets EPS Earnings Per Share